Korea’s 29 crypto exchanges now face regulatory scrutiny after meeting deadline
Out of the 66 crypto exchanges operating previously in Korea, only 29 of them met the authorities new regulations.
Following their failure to meet the new Crypto Regulations in South Korea, 37 crypto exchanges are billed for total closure. This was revealed by a report from The Korea Herald.
29 crypto exchanges gets certified
You will recall that we reported about Korea’s new Act on reporting and using specified financial transaction information in the country mandates that crypto exchanges looking to operate there must obtain an Information Security Management System (ISMS) certification and submit a report to the country’s Financial Intelligence Unit (FIU) by midnight on Sept. 24.
However following the Sept. 24 deadline, the country’s foremost financial regulator, Financial Services Commission (FSC), announced on Saturday that only 29 crypto exchanges that are ISMS-certified have submitted a report to the FIU before the deadline.
The commission also revealed that the application of the 29 crypto companies would be processed within three months.
Only 4 exchanges can offer Korean won trading pair
Meanwhile, the act that mandated the registration also clearly stated that exchanges that want to offer to trade in Korea won must also form a partnership with a local bank to offer real-name accounts to users.
However, only 4 out of the 29 exchanges that met the deadline have entered a successful partnership with Korean banks set to offer real-name accounts to their users. These four banks are Upbit, Bithumb, Coinone, and Korbit.
Since the bank partnership is required for exchanges to offer traders the ability to buy and sell cryptocurrencies in exchange for Korean won, the 25 exchanges unable to get this partnership are only allowed to operate as crypto-only exchanges.
The 29 crypto exchanges are now obligated to set up a system to adopt global anti-money laundering standards called the travel rule, as recommended by the Financial Action Task Force (FATF), an intergovernmental anti-money laundering watchdog.
Bithumb, Coinone, and Korbit are developing a joint system to comply with the travel rule while Upbit, the largest exchange in South Korea, is working on its own system.